HMO and Student Deposit Protection Rules in England

HMOs Follow the Same Deposit Rules — With More Moving Parts

A House in Multiple Occupation does not have its own deposit protection regime. The same rules under the Housing Act 2004 apply: protect the deposit in an authorised scheme within 30 calendar days, serve the statutory Prescribed Information on every tenant and relevant person, and comply with the Tenant Fees Act deposit cap.

What makes HMOs more complicated is the number of tenants, the likelihood of mid-tenancy changes, and the question of whether each room is a separate tenancy or part of a joint agreement. Each structure has different compliance implications for deposit protection.

Joint Tenancy HMO: One Deposit, Multiple Tenants

If the entire house is let on a single joint tenancy agreement — all tenants named on one contract — there is typically one deposit for the whole property. The deposit must be protected once, and the Prescribed Information must be served on every named tenant and every relevant person.

The deposit cap applies to the total annual rent under the joint tenancy. If the total monthly rent for the house is £2,400 (four tenants at £600 each), the annual rent is £28,800. Because this is below £50,000, the five-week cap applies: (£28,800 ÷ 52) × 5 = £2,769.23. This is the maximum deposit for the entire tenancy — not per room.

When one joint tenant leaves and a replacement moves in, you must update the scheme records and serve updated Prescribed Information on the incoming and remaining tenants within 30 days. This is the most common compliance failure in HMO management: landlords treat the deposit as a one-time setup and forget that every tenant change triggers a new 30-day PI obligation.

Individual Room Agreements: One Deposit per Tenant

If each room is let on a separate individual tenancy agreement — each tenant has their own contract for their room plus shared facilities — each deposit is a standalone obligation. You protect each deposit individually, serve the Prescribed Information on each tenant individually, and each deposit has its own 30-day deadline.

The deposit cap for each individual tenancy is calculated on that tenant's rent alone. If one tenant pays £600/month, their annual rent is £7,200. The five-week cap applies: (£7,200 ÷ 52) × 5 = £692.30. That is the maximum deposit you can take from that tenant.

Individual room agreements mean more administrative work — each tenant change is a fresh tenancy, requiring a fresh deposit protection cycle from scratch — but they also mean a dispute with one tenant does not affect the others.

Private Student Lets

Private landlords letting to students follow the standard assured tenancy rules. There is no student exemption from deposit protection. If you let a house to a group of university students on a joint tenancy, the deposit must be protected and the Prescribed Information served on every named tenant within 30 days.

Student lets have specific practical complications:

Third-party payers are common. Parents frequently pay the deposit on behalf of their student child. Under the Housing Act 2004, the parent is a "relevant person" and must receive their own copy of the Prescribed Information. Missing the parent means you have not complied with Section 213(5), even if the student received their copy.

High turnover. Annual student lets with complete tenant turnover each September mean a full deposit protection cycle every year — new tenancy agreement, new deposit, new scheme registration, new PI service. Deemed compliance from a previous year does not carry forward to a completely new tenancy with different tenants.

Summer vacations. If the tenancy runs over the summer but with different tenants, the deposit for the new tenancy must be protected separately. Carrying forward last year's deposit registration without serving fresh PI on the new students is a breach.

Purpose-Built Student Accommodation (PBSA)

Purpose-built student accommodation provided directly by a higher education institution — university-owned halls of residence — is exempt from the assured tenancy regime and therefore exempt from statutory deposit protection. These are not tenancies under the Housing Act 1988; they are licence agreements or specific institutional arrangements.

However, private student lets are not PBSA. If a private landlord lets a flat or house to students near a university, it is a standard assured tenancy and all deposit protection rules apply in full. The PBSA exemption covers only accommodation run by the institution itself.

Practical Steps for HMO Landlords

1. Decide your tenancy structure. Joint tenancy (one deposit for the house) or individual room agreements (one deposit per tenant). Your choice determines whether you protect one deposit or several.
2. Calculate the cap correctly. For a joint tenancy, use the total rent. For individual agreements, use each tenant's rent separately.
3. Track every tenant change. Set a reminder for every move-in and move-out. Each incoming tenant triggers a 30-day PI obligation.
4. Record relevant persons. Student guarantors, parents who paid the deposit, local authority payers — every one must be on the scheme record and receive the PI.
5. Keep per-room inventories. In an HMO, room-specific check-in and check-out inventories are essential for deduction claims. Shared-area condition should be documented at each tenancy start and end.

For the full deposit protection workflow tailored to all tenancy structures — including joint tenancy, individual, HMO, and student lets — the Tenancy Deposit Protection guide covers every scenario with checklists and worksheets.

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